Wacker thrives in North, Central America with innovation center, academy

ANN ARBOR, Mich.—Nearly three years after opening its doors, Wacker Chemical Corp.'s combined innovation center and North American headquarters is thriving—with room to grow.

The firm's post-modern, 140,000-sq.-ft. facility in the Great Lakes State has collected the best and brightest under one roof to foster new ideas for Wacker polymers, silicones and biosolutions.

Christoph Kowitz, who took over as president and CEO of the North and Central American (NCA) Wacker unit May 1, 2024, sat down with Rubber News at the research and development center Nov. 8.

"This is a super dynamic market, the growth market in the world right now," Kowitz said of the NCA silicone market, which is expected to grow at a CAGR of 8 to 10 percent through 2030. "China is flat. This market is phenomenal. Dow is a fantastic company, but they gave us room here in the silicones space."

As Wacker looks to gain further market share in the EV, medical device and construction arenas, Kowitz said customer relationships are critical.

"This is especially true in the NAFTA region," he said. "On the material rubber side, we have 1,500 products, and this is where our good relationships with customers come in.

"We are always looking at what is most attractive. It boils down to relationships with customers, and how we can customize our products. We have to have an edge over the Dows of the world, and in certain segments, we do. It's clear."

Wacker Chemical Corp., a division of Munich, Germany-based Wacker Chemie A.G., was founded in 1965 and includes the Andes region of South America, in addition to North and Central America.

Administration, marketing and sales, and technical competence centers for the health care, pharmaceutical, construction, automotive and food industries now are located in Ann Arbor, which also is home to the Wacker Academy.

Wacker invested about $50 million in the facility in December 2020, building it from the ground up. The 300 employees at the 18-acre campus today moved there in April 2022, and the facility opened in May 2022.

About half of the employees there are executives, and the other half are research engineers.

While the discoveries at the innovation center benefit the entirety of Wacker, Kowitz wants the focus to remain local.

"We are not as large as one might think," he said. "We have 150 people across a broad spectrum of research avenues. For that reason, we do not want to overextend ourselves and we want to retain some of that coherence. We are small enough that we can communicate on-site, and this is a unique dynamic to leverage.

"But I don't want to be all over the place. I want results and I want to build on that. It is a healthy exchange that we have here."

Wacker's scientists and senior leadership previously worked out of three separate Michigan locations, including nearby Adrian, in the company's specialty silicones, polymers, polysilicon and biosolutions segments.

The innovation center in Ann Arbor also includes laboratories, a full-service cafeteria, a 24/7 fitness center and open collaborative work spaces.

There are areas for extrusion and injection molding prototyping for LSR and HCR testing, and innovative compounds are mixed on-site for customers.

"We want to grow," Kowitz said. "In silicones, we have the room. ... It does not take much insight to know that. We have a fantastic foundation here, and with production in Adrian for specialties ... we can do even better."

Wacker concentrates on HCR and LSR testing in Ann Arbor, while the company continues to produce fluids, dispersions and emulsions out of its operations in Adrian.

The Adrian site, established in 1969, remains a growing base of operations for the approximately 275 employees there.

Wacker has 10 locations across the U.S., including multiple technical centers and manufacturing facilities.

Wacker Chemical Corp. comprises about 16 percent of net sales for Wacker Group, a $7.2 billion multinational corporation.

Wacker settled on Ann Arbor, a major hub for research and development, to be close to Detroit's automotive production and regional medical device manufacturing.

Wacker also chose the city for its intellectual capacity.

The area is surrounded by the University of Michigan in Ann Arbor; Eastern Michigan University in Ypsilanti; and Michigan State University in Lansing.

Beyond that, several technical non-profits dot the Michigan region, providing further outlets for collaboration at the Wacker Innovation Center.

"Wacker Academy is here for product development, strictly for testing," Kowitz said.

There are two other Wacker Academy locations in the U.S., in Allentown, Pa., and Dalton, Ga., both of which also "focus on the demands of North American customers and distributors."

"Each of our Wacker academies has its unique strengths and focuses its training programs on different areas," he said. "Ann Arbor specializes in silicone chemistry and cyclodextrin applications, while Allentown concentrates on polymer chemistry for the construction, paints and coatings, and the film and adhesives industries for medical applications."

Dalton focuses on VAE dispersions as carpet binders, Kowitz added.

"Customers and distributors can come to any of these sites with trainers and the Wacker teams to get a tailor-made training program," he said.

Additional training rooms of various sizes in Ann Arbor can be made available depending on the number of participants.

"In Allentown, we have two training laboratories that we can offer our participants, and four additional laboratories are available for training courses on specialized topics," Kowitz said. "In addition to coating machines, compounding equipment and foam mixers, the facilities here (in Ann Arbor) also include a variety of presentation rooms, an office area and a conference room.

"Ann Arbor now is indeed the R&D hub for the Americas."

As automotive works its way toward increased EV production, Wacker hopes to follow with silicone for wiring harnesses, seals for all types of connections and insulators for high-heat batteries.

Wound care and adhesive-related silicones continue to see high demand in the U.S. as well, Kowitz said.

And the burgeoning construction market typically unifies the research of the two chemical divisions at Wacker, polymers and silicones.

"Construction, you hit it," Kowitz said. "We have to look at markets that are growing. EVs, the medical device industry, we need to partner there and we do today ... and we will strengthen those partnerships.

"But I don't want to forget HCR in insulation, energy infrastructure, ... construction is such a core market for us. With the polymer guys, we have the resources."

In the NCA region, there is no question Wacker has invested in R&D over capacity of late.

"That's an interesting question. I tend to talk about capacity first," Kowitz said. "But it is great what we did here. The development work and open-mindedness for the various markets are important.

"This center has really opened our eyes to different topics. When we look at the battery space, we have come up with cool new products here that would not have come up from a capacity point of view. We have groups here doing only R&D with universities. So it definitely has been a philosophical change."

Kowitz noted that Wacker's comprehensive long-term outlook buoys the company such that innovative investments can be made.

"The perspective is very long-term at Wacker," Kowitz said. "It is about the culture here and the culture here is amazing."

With 3M getting out of the PFAS game by the end of this year and a dizzying array of regulations being hammered out in the European Union and North America, Kowitz said Wacker's home country of Germany will not produce any more fluorocarbons.

"We will import them from China," he said. "There is a huge process around this in the EU and no results have been issued yet.

"I am thankful that Arkema is still investing in Europe, but the people in Brussels ... it's bad," he said. "We need these polymers. ... Without them we have no medicine, no critical aerospace applications."

Because of the critical performance traits that fluorocarbons impart, they will continue to be used for 20 or more years, Kowitz predicted.

"We need them. I'm not worried, especially in the U.S.," Kowitz said. "For Wacker, is it a threat or opportunity?"

Kowitz sees the latter.

"Silicones are water-repellent, reasonably chemically stable and nicely inert," he said. "Is there a case for our materials? Is there a threat? Not so much. We were never strong in fluoroelastomers.

"So we see this as an opportunity. People don't want to buy silicones, typically. They buy silicones because they have to, for their performance properties. And nobody wants to buy fluorocarbons, either, as they are more expensive than silicones.

"But while they are great for frying pans and other products ... silicone resins can be used here as well. There are other solutions out there."